BELGRADE (Serbia), October 18 (SeeNews) – Greece's Piraeus Bank said it has agreed to sell its Serbian banking and leasing operations to Serbian lender Direktna Banka for a cash consideration of between 58 million euro ($68.1 million) and 61 million euro.
The exact consideration will depend on the financial performance of the divested assets until completion of the transaction and will include a combination of direct sale price and a simultaneous reduction of the capital of Piraeus Bank Beograd AD, the Greek lender said in a statement on Tuesday.
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The deal is expected to close in the first quarter of 2018, following the receipt of all necessary approvals, and is neutral to Piraeus’ CET-1 ratio, the bank added.
"In accordance with our Restructuring Plan commitments to reduce our international presence, we are announcing the sale of our Serbian operations to Direktna Banka after a highly competitive sale process. We believe that Piraeus Bank AD Beograd customers and employees will benefit from being part of an enlarged banking group and we look forward to the timely completion of the transaction," the CEO of Piraeus, Christos Megalou, said in the statement.
The transaction is conditional upon the usual corporate and regulatory approvals, including those of Serbia's central bank and the Hellenic Financial Stability Fund (HFSF) and represents another step towards the implementation of the Greek lender's restructuring commitments agreed with the Directorate General for Competition of the European Commission (EC).
In June, Greek media reported that Piraeus intends to sell its wholly-owned subsidiaries in Albania, Bulgaria, Romania and Serbia as part of a plan to reduce its foreign exposures. Piraeus’ plan includes reducing the bank's non-performing exposures (NPEs) to below 20 billion euro by 2020 from 33.3 billion euro in the first quarter and its non-performing loans (NPLs) past due more than 90 days to around 8 billion euro from 23 billion euro at end-March.
In July, Direktna Banka Kragujevac completed the integration of Findomestic Banka Beograd, which it acquired from BNP Paribas in February. After the integration, Direktna Banka has 400 employees and has doubled the size of its branch network. Direktna Banka was established after Serbian entrepreneurs Andrej Jovanovic and Bojan Milovanovic acquired KBM banka from Slovenian Nova Kreditna Banka Maribor (NKBM) in February 2016.
($=0.8516 euro)